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INNOVATORS
INNOVATIONS
– special issue –

Smaller,
better,
faster
Fred Haney’s vision turns
modular construction
theory on its head

14 How Cenovus Energy is able to dominate the

quest for in situ technology improvement

21 MEG Energy’s RISER production enhancement

system fortifies its position as an efficiency leader

29 Why an oxyfuel technology developed for space

could revolutionize SAGD steam generation
PM40069240
INNO VATO R S & I n n o vat i o n s
better,
Fred Haney’s vision turns modular construction theory on its head
Fred Haney likes most sports, but
it’s golf that suits his character
best. Why? “The sport chal-
lenges yourself to improve,”
says Haney, executive director
of design engineering at Fluor
Corporation.
That drive for improvement
helped propel Haney’s inven-
tion and his team’s creation of
Fluor’s 3rd Generation Modular
Execution, which is bringing the
oilsands industry up to 60 per cent
reductions in facility plot space
requirements and 20 per cent in
capital cost savings for all types
of plant construction.
It was the recession days of
2008-09 when Haney spot-
ted a need for improvement in
modular construction. “We had
projects that were not meeting
clients’ expectations,” he recalls,
pointing to cost overruns and
schedule slippage. Despite the
savings modularization was of-
fering, labour was still a key issue.
So Haney and his team needed
to find a way to take even more
work out of the field.
Scott McArthur, Fluor
Canada’s general manager of
16 OILSANDS REVIEW | MAY 2013
Smaller,
faster
By Graham Chandler
business development and sales,
provides some background.
“First-generation modular was
things like main pipe racks and
backbone racks—that’s been
around since the early ’90s.”
Second generation happened
in the early 2000s, McArthur
continues. This takes the same
building block approach but adds
more complicated equipment.
“It’s still a mechanical approach—
pipes, equipment, steel on a
module,” he explains, adding that
this strategy took 30–40 per cent
of work out of the field.
The second-generation ap-
proach took a tremendous amount
of engineering to successfully
execute. It was fairly successful,
but they were looking for more.
Haney’s team looked at
what was good and bad about
modular projects—onshore and
offshore. “We took a look at
why we weren’t moving to the
next level, and a lot of it had to
do with electrical and control
systems and getting cable onto
modules and getting that work
off-site,” says Haney. Inclusion
of these systems demanded new
thinking about terminations and you can get the cabling onto all
connections. the modules.”
“The biggest challenge we “3rd Generation really does
had was taking the amount of take the approach and turn it on
work off-site to its maximum its head,” adds McArthur. “When
for remote sites,” says Haney. we started doing that and having
“Getting E&I [electrical and the module strategy driving the
instrumentation] and cabling was layout, we started reconfiguring
one part. And getting a tighter fit how we live with the traditional
of modules so that we had fewer layout of a facility and it led
interconnections. So we had us almost by happenstance to
to think differently on how we reconfigure our work process.
would lay out a facility; we had to When we started reconfiguring
change our thinking so modular- the work process, that was the
ization would drive the layout and 3rd Generation.”
not the opposite.” The process takes a typical plant
Haney says that was the real layout and shrinks space require-
breakthrough. The only way to ments by more than 60 per cent.
make the system work was to McArthur notes that this reduces
shun traditional design methods the amount of materials—less steel,
and go to what he calls a process less pipe, less electrical cable—
block layout approach, which driving the cost down and reducing
allows minimization of inter- the amount of labour needed at the
connections to two or less. “You site. Moreover, the overall number
will end up having a facility where of modules is reduced because
The inventor: Fred Haney, executive director of design engineering
at Fluor Corporation, has invented a modular facility
construction system that is designed to relocate up to 90 per
cent of field construction hours to the mod yard, reducing total
installed costs by up to 20 per cent compared to current practices.
 INNO VATO R S & I n n o vat i o n s

“
— —

The biggest
challenge now is
getting the mindset
shifted so that you
can execute to this
new methodology.
“
PHOTO: Charles HOpe

— —

OILSANDSREVIEW.COM 17
INNO VATO R S & I n n o vat i o n s
Fluor is taking things that are nor-
mally not modules and making
them modules; things that were
traditionally fabricated in the field
are put into the module.
Haney says it’s such a novel
approach that “the biggest chal-
lenge now is getting the mindset
shifted so that you can execute to
this new methodology.”
And that is happening al-
ready on several large oilsands
projects. “We probably have
seven or eight projects currently
executing in this mode,” says
Haney. Among these are Suncor
Energy Inc.’s pending MacKay
River Phase 2 project and Shell
Canada’s Quest Carbon Capture
and Storage Project, currently
being constructed, near Fort
Saskatchewan, Alta.
Shell’s interest in 3rd
Generation came early in the
Quest project planning. “We
started early in the [front-end
engineering and design] phase,
when engineering was maybe
only five per cent complete,”
says Steven Peplinski, resident
engineering team manager for
Quest. “Rather quickly we made
a decision based on the benefits
we saw.”
And true to the 3rd Generation
concept, modularization drove
the layout. “We had an available
plot space within our Scotford
Upgrader, which would have
been barely adequate for Quest
[on a conventional basis],” says
Peplinski. “By adopting 3rd
Generation, we actually used less
space than we had allocated.”
One of its biggest attractions
for Shell was site safety through
reduction in on-site person-
nel. “We are doing a brownfield
construction—right next to an
operating upgrader,” he adds.
“Our initial assessment was we
would need maybe 1,000 people
on site; currently, peak workforce
looks like we’ll have about half
of that. Just having less people
on a construction site next to an
operating unit means less expos-
ure hours, fewer people to bring
on site every day and simpler
evacuation should the need arise.
So that was a big bonus for us.”
18 OILSANDS REVIEW | MAY 2013
The shift in mindset described
by Haney was an important sell.
“It took very heavy involvement
in buy-in from our operations
people,” says Peplinski. “It all
appeared very congested. They
were concerned about ergonomic
and human factors—will the
valves be accessible, will meters
and equipment be accessible,
can they easily be pulled for
maintenance, will the walkways
In situ facility plot size reduction
Plot area approximately
84,000 square metres
▼
Plot area approximately
200,000 square metres ▼
The 3rd generation module concept would take, for example,
a 200,000-square-metre plot area for an in situ oilsands facility
and shrink that down to 84,000 square metres.
be wide enough, et cetera. But it
hasn’t proven to be a barrier: with
80 per cent of the engineering
design now complete, construc-
tion should wrap up in 2014.”
Overall, savings are proving to
be significant for most projects:
Haney cites 20 per cent cost
reductions over standard second
generation. “This is our execu-
tion basis for projects now.” On a
30,000- or 40,000-barrel-per-
day SAGD facility, savings of that
magnitude can easily run into
tens of millions.
Numbers that high get global
attention. “We are executing
it in all our projects in Calgary,
but also now on a global basis,
because modular execution
and modular methods are being
recognized as a way of controlling
and providing a little more cost
certainty and schedule certainty,”
Haney says. It fits with world
trends in the resource extraction
industries because projects are
getting more and more remote as
easy finds deplete.
Looking ahead, Haney sees
a total integrated engineering,
procurement, fabrication and
construction (EPFC) solution
using 3rd Generation. That would
Source: fluor corporation
provide clients with overall cost
reduction, and cost and schedule
certainty. “But you still have to be
able to execute to achieve those
results,” he says. “It’s great to
say we have a design tool, but we
really have an execution platform
for the whole thing, and that’s a
key element.”
The other area going forward
“is you are going to see a lot
more standardization, replica-
tion of facilities combined with
modules,” says Haney. “A pro-
ject I’m doing in Spain right now,
for example, is a modular facility
that’s going to be replicated
several times using standard
modules. In 10 years, you’re
going to see replicable modular
facilities much more than you
do today.” He says the modules
would be interchangeable on
different types of projects. “For
example, a design may have eight
modules for this application, and
you may only need six of them.
On another location, you may
need seven of them; you just plug
in that extra module.” It will still
be 3rd Generation, defined as
an integrated EPFC solution with
standardization and replication.
The approach is attractive,
for example, to SAGD projects
where phased growth has
become the norm. “They’re not
trying to build, say, a million-
barrel-per-day [project] in one
fell swoop,” says McArthur.
“They are trying to get there in
stages so they manage their cash
flow, their investment.” Once the
first investment is successfully
running, they can essentially
install replicas for succeeding
phases, eliminating “too much
reinventing of the wheel.”
SAGD operations were where
most of the initial 3rd Generation
research was done. “We did a
lot of work on SAGD facilities to
give us the real sweet spot,” says
Haney. “For example, we have
what I call metrics that tells us
the most cost-effective approach
on a capital basis and also looked
at what’s the sweet spot on a [net
present value] basis.” He says
that a 10,000-barrel-per-day
facility may be the lower limit for
the approach—at 5,000 barrels
per day, commerciality may be
a struggle. “We’ve looked at all
sizes and we have a very good
database of what a modular
design should look like using 3rd
Generation.”
Haney finds it most rewarding
that owners are accepting the
change. “They are now seeing
they can’t just do the status quo,
they have to change themselves.”
The industrial innovation
stems from Haney’s personal
inspirations.
“The single most important
motivator which keeps me en-
gaged in what I accomplish is the
ability to learn something new
every day. My approach to design
is to understand the basis which
drives design decisions.”